Rob Clark
Foreign Policy Director at Curia UKThis week, British Prime Minister Rish Sunak announced a long-awaited and much anticipated rise in defence spending. It comes as the Prime Minister has travelled to Poland to meet NATO chief Jens Stoltenberg, and Polish Prime Minister Donald Tusk, to discuss European security before the NATO Summit this July in Washington, DC. The announcement has come after weeks of repeated publicly made requests by former senior military figures and ministers alike to increase Britain’s defence budget in light of the growing instability across the globe.
The Prime Minister’s statement comes as Number 10 are expected to announce a raft of new policies this week, which were originally aimed for this year’s Conservative party conference and subsequent election manifesto but have been brought forward to help shore up the Prime Minister’s leadership, seen as flagging in the polls before the crucial May elections.
Current UK Defence Spending
The question of Britain’s defence spending has been subjected to much speculation, analysis, and criticism over recent years – usually exacerbated during intense periods of global instability and chaos, such as the war in Ukraine, the Houthi strikes on international shipping and Royal Navy vessels in the Red Sea, and more recently by Iran’s aerial bombardment of Israel earlier this month.
Adding to the chorus for increased defence spending has been a plethora of both serving and former Cabinet ministers publicly stating that the UK is not spending enough on defence. Most high profile amongst these were his current Defence Secretary Grant Shapps, in addition to his predecessor Ben Wallace – in a rare move for a sitting Secretary of State publicly declare that his department is in affect underfunded.
So, just how much does the UK already spend on defence, and what will the new rise look like? The UK’s current defence spending is approximately £51 billion; this figure is then often inflated by the end of each tax year due to rising inflation and what’s called supplemental spending, or additional spends, which has included in recent years the budget for military assistance to Ukraine, often not factored at the beginning of the tax year when the Treasury announces departmental budget plans.
Roughly one third of this budget is ringfenced annually for the UK’s nuclear deterrent; another third on capital spending; and between about one fifth and one quarter (though in some years rising to over one third) on procurement projects and platforms. The £50 billion represents around 2.3% of the UK’s GDP – so well above the mandated 2% threshold set by NATO at the Newport Summit in 2014, ten years ago in the wake of Russia’s invasion of Crimea and eastern Ukraine.
At the time, only two other NATO member states (the US and Greece) met the 2% figure (Estonia and Poland very close at around 1.9%). The remainder of European NATO (and especially Canada being in such close proximity to the US) were still enjoying the post-Cold War peace dividend, as stocks, ammunition, and platforms all slowly dried up, became unserviceable, and political attention sharply turned to the Middle East after 9/11.
When Russian troops crossed into the Donbas in spring 2014, this author was still fighting in the green zones of the Helmand – war in Europe seemingly such an unlikely and remote prospect that NATO had simply not planned for.
Increased High-Tech Capabilities
Despite Parliament’s Public Accounts Committee warning last month that the Ministry of Defence had a £17 billion gap in its plans to equip the military over the next 10 years, Grant Shapps has said that this extra funding will be used to focus on important high-tech capabilities, such as increased air defence missiles, and British production of 155mm artillery ammunition the likes of which has helped keep Ukraine in the fight against Russia.
Crucially as the Government has recognised a lack of industrial capacity depth, £10 billion is earmarked to grow the domestic defence industry over the next six years – a very welcome move indeed which will reassure an industry used to the chaotic and old fashioned procurement systems of the UK.
Interestingly, a new Defence Innovation Agency, modelled on the US Defense Advanced Research Projects Agency, will be set up to pioneer greater defence innovation with disruptive and advanced technologies.
This spending commitment would mean UK defence spending rising from £64 billion this year (after inflation and supplementals) to £78 billion by 2028-29, with a sharp rise to £87 billion by 2030-31, at which point the 2.5 per cent figure would be hit.
A 0.2% Increase Over 6 years
Whilst this week’s announcement of a 2.5% commitment to defence is welcome news, it was this Prime Minister who campaigned on 2.5% almost two years ago now, stating that this would be met when the fiscal situation allows, and a commitment to 3% by the end of the decade. The Chancellor himself even committed to 3% when campaigning for the Conservative leadership.
Considering that this week’s announcement represents a mere 0.2% of GDP increase over the next 6 years, the Prime Minister’s original commitment to raise to 3% by 2030 is a stark reminder of just how little this represents – inflation and costly programme over-runs will strip much of that 0.2% GDP increase away by 2030.
If the Prime Minister had been a little bit bolder, and committed to an immediate rise to 2.5%, and to 3% by the end of the decade – two full years after he originally declared his intention to do so – then he would have put the political pressure on Labour to match that spending commitment at a time when Labour are storming the polls and defence, for the first time in a generation, this is becoming an electoral issue.
So far, the Labour front benches have been very quiet on defence spending, declaring that they will raise defence spending when the economic situation allows.
This article was written by Curia’s Director of Foreign Policy, Rob Clark. To read more insight regarding issues facing foreign policy and defence, click here.